Compromising the Doctor-Patient Relationship: The Impact of the House Health Care Bill

On July 16, the American Medical Association (AMA) voiced its
support for H.R. 3200, the America's Affordable Health Choices Act
of 2009. Letters of support from the American College of Surgeons,
the American Academy of Family Practitioners, the American College
of Physicians, and a number of specialty organizations soon
followed, prompting President Obama to state that "the docs are on
board" with his health care reform plan.

It is becoming increasing clear, however, that a sizeable
segment of the medical profession does not agree with the AMA's
decision, and many feel that H.R. 3200 "will ultimately limit
patient choice, will put the government between the doctor and the
patient, interfering with patient care decisions, and because of
its tremendous cost--immediately and in the future--will be a
burden to all Americans."[1]

Doctors Want Health Care Reform

Physicians understand better than the President and Congress
about the burden of the large number of uninsured Americans and the
high levels of uncompensated care. Physicians provided an estimated
$22.4 billion of uncompensated care to the uninsured in 2008.[2] Unlike
hospitals, physicians are generally not subsidized for this
care.

Essentially all physicians want to see the American health care
system become as good as it can be, and most are willing to make
sacrifices to achieve that goal. However, at least a dozen state,
local, and specialty societies--representing more than 45,000
physicians--have already expressed opposition to the current House
reform proposal, and others remain undecided pending further
discussion of key issues.

Concerns with the Current Proposal

Physician groups have cited a number of serious concerns with
H.R. 3200. The most troublesome issues for physicians are the
inclusion of a government-administered public plan to compete with
private insurance plans and the methodology that will be used to
reimburse physician services in both the public plan and
Medicare.

The Public Plan Option. The House health reform bill
includes a public plan that will be administered by the federal
government and "compete" with private insurance plans. However,
premiums in the public plan will be at least 10 percent lower and
more likely 20-25 percent lower, on average, than premiums in
private plans.[3] The Congressional Budget Office initially
estimated that enrollment in the public plan will be as low as 8-9
million people but admitted that variability in the numbers is
likely to be considerable.

In fact, the Lewin Group, a non-partisan health care consulting
firm, more recently estimated that when fully implemented, the
number of enrollees in the public plan is likely to be 103.4
million, and an estimated 88.1 million of these enrollees would be
shifted out of their current employer-based coverage.[4]
Between Medicare, Medicaid, SCHIP, and a large enrollment of
Americans in the new public plan, the government could control the
health care of well over 200 million Americans.[5]

This would move American health care closer to President Obama's
once-stated preference for a single-payer system. According to the
legislation, physician participation in the public plan would be
"voluntary." However, as physicians know from the managed care
experience, non-participation in a plan of that size would not be a
practical option for most physicians.

Physician Payment Methods. More troubling is the
congressional plan to replace the current doctor payment system
with the Medicare Economic Index (MEI), which attempts to estimate
inflation in the costs of providing medical services. However, the
MEI was implemented in the Medicare system in the 1970s, did not
reduce Medicare spending, and was abandoned.[6] There is no reason
to believe it will be any more effective this time around.

According to recent Lewin Group analysis, if the public plan
would use Medicare payment levels plus 5 percent, as planned, some
physicians would "win" but many physicians would "lose." Physician
income declines would be determined by the degree of enrollment in
the public plan in different areas of the country and the impact of
Medicare payment on physician income in different areas of the
country. In Maine, for example, where Medicare physician payments
are 63 percent of the private payment to physicians, the per capita
income loss would be substantial. According to AMA survey data,
faced with significant income cuts, many physicians would be forced
to make significant changes that could affect their practice, such
as deferring the purchase of new medical equipment and not
investing in information technology.[7]

The Doctor-Patient Relationship

Even more important, however, is the effect the current
legislation would have on the privacy of medicine, an institution
that the AMA has sustained since the organization was founded in
1847.

Physicians understand the potential value of clinical care
guidelines and even comparative effectiveness research as tools
that can add to the fund of knowledge to help inform patients and
physicians. But the ultimate decision regarding what is appropriate
in an individual clinical situation should not be mandated or
coerced by MedPAC, a health care czar, or any other "independent"
entity.

Although there is concern among the general public about the
costs of health care, polls consistently show that the vast
majority of Americans are satisfied with their individual health
care arrangement and the quality of care they receive.[8] The
President has said, repeatedly, that if you like the doctor you
have, you can keep your doctor. However, this legislation
compromises the relationship you have with your doctor.

By increasing government involvement in the doctor-patient
relationship, the current legislation contradicts President Obama's
promise to build on what is good in the system.

Misplaced Value Incentives

For decades the government has tried to control spending in
Medicare by deciding what benefits patients should receive and
setting the price for more than 7,000 individual services.
Obviously these efforts have been entirely unsuccessful. Congress
has so far failed to recognize that cost, as well as quality of
care in the health care system, is driven by decisions made by
individual patients and their doctors. To contain costs, the
incentive structure needs to be shifted to the individual
level.

Doctors should be able to privately contract with patients and
set their own prices. If some patients wish to spend out-of-pocket
for a physician who provides quality, efficient care, they should
be allowed to do so. This will provide incentives at the individual
doctor-patient level. Patients will demand cost and quality
transparency, and physicians will be more conscious of where they
stand in terms of outcomes and efficiency and be incentivized to
continually improve. This is more likely to lead to individual
value-based decisions than federal price setting and global
spending targets.

All Doctors Are Not on Board

Physicians understand the need to undertake serious reform of
the American health care system. There are a number of ailments
that need to be attended to before the system can be as healthy as
it could be. Although the AMA and several other physician
organizations feel that H.R. 3200 is the right prescription, a
growing number of physicians believe that this hastily prepared
treatment plan is likely to make matters worse.

John O'Shea, M.D., is Health Policy
Fellow in the Center for Health Policy Studies at The Heritage
Foundation.

[4]Memorandum to Stuart Butler Ph.D., , Vice
President, Domestic and Economic Policy Studies, The Heritage
Foundation from John Shiels and Randy Haught, Analysis of the July
15 draft of The American Affordable Health Choices Act of 2009,
Revised July 23, 2009, p. 5.

[5]This
assumes current Medicare enrollment of 44.8 million, Medicaid/SCHIP
enrollment of 70 million following the proposed expansion, and
122.9 million in the public plan. See Elmendorf, letter to
Rangel.

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